CORPORATE DIPLOMACY

International relation not only affect governments but public at large. In globalised world, international relations have been reached to our neighborhood tea stall or grocery shop. We judge a nation by product, we buy. We may not know, where Finland is in world map, but we know Nokia in our hand. We will surely judge Finland by Nokia. This is a public diplomacy.

The ever expanding flow of commercial products and services across borders has important implications for public diplomacy. Despite the escalation of transnational corporations, high profile brand names are closely connected with their countries of origin. Coca Cola, Nike and McDonald’s are inextricably tied with the United States. The same associations are true for Ikea with Scandanavia, Nokia with Finland, Sony with Japan, and Nestle with Switzerland.[i]

Corporate diplomacy is crucial to the credibility of a company in explaining, positioning and carrying out its business, especially in these times when the image of a nation abroad is not bright.

International commerce depends upon the goodwill of the public, which must be continuously built so that it works as a shock absorber when some unforeseen calamity occurs and crisis communication strategy has to be deployed. The creation and the development of this intangible and valuable asset, the public goodwill, is the function of corporate diplomacy.[ii]

In 1999, the U.S. State Department introduced the Award for Corporate Excellence to recognize companies that display best business practices, strong community service programs, and exemplary corporate social responsibility practices abroad.[iii]

The rise in corporate diplomacy is being fueled by a combination of growth, globalization, and an increasing realization by business executives that they have to play an active role in influencing governmental rule making and in shaping public perceptions.[iv]

Public Diplomacy Division of Ministry of External Affairs has discussed this concept in its Public Diplomacy Conference in November 2010. This writer was present in this conference. A particular session looked at how companies are engaged in corporate diplomacy and what could be the best way to engage and partner with them for public diplomacy objectives. The conference discussed what potential role can it play and finally the growing role that the corporate sectors like the chambers of commerce, private entities, etc, play in public diplomacy.

The session dedicated to corporate diplomacy was focused on three important aspects. Firstly, how to link private sectors’ media and image management activities with public diplomacy, secondly, what does corporate world offer in the public diplomacy domain and thirdly, how can we take the experience that corporate world has for promoting public diplomacy.

Mr. Som Mittal of NASSCOM discussed the role of corporate sector is also going beyond Corporate Social Responsibility (CSR) and philanthropy. Corporate diplomacy is about building trust, providing perspectives and help governments in their transformational agenda of inclusive growth. With Indian corporate going global, the engagement is not only with communities and society in India but also in the countries they operate. Mr. Mittal concluded by saying that today the role corporate diplomacy plays is not just at the company level but also to represent the industry, the country and further the India Brand.

Mr. Roger hayes of Henley Business School has opinion that just as diplomats are becoming public diplomacy entrepreneurs promoting their country’s products, policies and values, so CEOs and their corporate staff are acquiring the role of corporate diplomats able to build relationships with other organisations and individuals in other parts of the world. One of the roles of corporate diplomats is to increasingly understand the culture as well as the economic and political context, analyse it and then share it. Hayes pointed out that governments are increasingly using the tools of the private sector, such as marketing, advertising and public relation techniques and these are all strategic tools as well as tactical tools.

With increasing sophistication in working methodology of corporate houses, their ability of influencing governments goes beyond limitations. In term of Gross Domestic Product as well as human resource availability, many corporate houses are of much better position than many nation states. This is obvious, with increasing influence and power; these corporate houses affect the national and international policies of nation states.

With growth of businesses beyond borders, the corporate foreign policy became multi-dimensional depending upon size of the corporate house. One particular dimension deals with its internal policies relating to manpower policies and cross cultural collaboration in a multinational company, and another with import, export, foreign exchange, merger and acquisitions, sponsorships of international sports events, cross border social responsibility exercises and multilateral trade treaties.

These days, business talks are regular feature at the sideline of every bilateral and multilateral talk. There are several Industry bodies, bilateral and multilateral chambers of commerce which are actively participating in corporate diplomacy. Negotiations in World Trade Forum are best example of corporate and public diplomacy initiatives along with conventional diplomacy.

Corporate diplomacy is a new field to explore for professionals in corporate India.

[My brief article of same heading is published in 93st Edition of e Newsletter (October 2011) of Mysore Chapter of Institutes of Company Secretaries of India. This newsletter is also available on official links: http://www.icsi.edu/mysore or http://www.esnips.com/web/icsimysore. here, I am giving full article for benefit of all concerns]

Writer of this blog, Aishwarya Mohan Gahrana is Practicing Company Secretary and Insolvency Professional working with M/s Aishwarya M Gahrana & Associates, a New Delhi based peer reviewed firm of company secretaries having pan India presence through friends and associates. This blog is a knowledge sharing initiative. Views expressed here is of writer; not of the organization(s) he is working with.